1. There are two systems for recording and reporting the cost of merchandise sold: the periodic and perpetual inventory systems. Match each system to its proper inventory record and balance characteristics:

   Inventory System	Inventory Records	Inventory Balance
   Periodic
   Perpetual

   Understanding the Business Transaction

   Nov. 7, 2015	Lamont Enterprises purchases $11,100 of merchandise from Christopher Co. and receives an invoice with terms 2/10, net 30.
   Nov. 10, 2015	Lamont Enterprises returns $3,100 of merchandise due to an error in shipment and issues a debit memorandum.
   Nov. 17, 2015	Lamont Enterprises pays the amount due to Christopher Co. from the purchase on Nov. 7 less the returned items on Nov. 10.

   Recording in the Accounting SystemJournalize the November purchase transactions for Lamont Enterprises. For compound entries, if an amount box does not require an entry, enter "0".

   Nov. 7
   Nov. 10
   Nov. 17

   Financial Statement ImpactEmory, Inc. will begin a new sales discount policy on June 1. The new policy provides credit terms of 1/10 net 60 for all credit sales. The prior credit terms were net 60. MyPlace, Inc. is a customer of Emory, Inc. and wishes to evaluate the potential savings from taking the discount. A slider is provided for the estimated June purchases from Emory, Inc., as follows.A second slider provides an interest rate assuming MyPlace borrowed money to make the payment within the discount period.Click here and use the sliders to answer the following questions using the estimated purchases and interest rate sliders for the savings (cost) calculation.

   1.	If the estimated purchases are $60,000 and the interest rate is 6%, what is the estimated savings (cost)?
   	$

   2.	What combination of estimated purchases and interest rate produces the largest savings?
   	$, %

   3.	What combination of estimated purchases and interest rate produces the largest cost?
   	$, %

   4.	At what maximum interest rate from the slider selections would MyPlace take the discount?
   	%

   5.	Would MyPlace take the discount if the interest rate were 10% for any estimated purchases assumption?

   6.	Which combination produces the greatest savings, $40,000 and 4%; $60,000 and 6%; or $80,000 and 6%?

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